The Fed Still Has a Powder Keg at Its Disposal
So far, central bankers have simply exhorted Congress to provide more Covid-19 aid. They could be much more forceful if they wanted.
Can you hear me now?
Photographer: Drew Angerer/Bloomberg
The Wall Street Journal’s editorial board published a column last week titled “The Fiscal Federal Reserve,” which admonished Chair Jerome Powell for imploring the U.S. Congress to do more to aid out-of-work Americans, struggling small businesses and strapped state and local governments. “Powell signs up to monetize trillions of dollars in more spending,” they wrote.
In many ways, Powell and his colleagues have actually been relatively restrained in their messaging. They could be much more forceful — the only question is whether they want to open that potential Pandora’s box.